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Can the Capitol Center Building become a desirable place to live?

Opponents to development of the long-vacant Capitol Center Building - known locally as "The Mistake by the Lake" - say it's time for the state and City of Olympia to buy the block of buildings and tear them down and finish the planned isthmus park.

Opponents to development of the long-vacant Capitol Center Building - known locally as "The Mistake by the Lake" - say it's time for the state and City of Olympia to buy the block of buildings and tear them down and finish the planned isthmus park.
Tony Overmantoverman@theolympian.com

Olympia attorney Allen Miller, left, and Olympia Capital Park proponent Jerry Reilly want the City of Olympia to purchase and to tear down the Capitol Center Building.
Tony Overmantoverman@theolympian.com

Olympia Capital Park proponent Jerry Reilly (from left), former mayor Bob Jacobs and attorney Allen Miller are reflected in the neglected doorway of a building sharing the block between Fourth and Fifth Avenues with the Capitol Center Building on the downtown Olympia waterfront. The group wants the City of Olympia to purchase the property and tear down the buildings.
Tony Overmantoverman@theolympian.com

The Capitol Center Building on Fifth Avenue (background right) on the downtown Olympia waterfront as seen from the Port Plaza tower looking south.
Tony Overmantoverman@theolympian.com

The Capitol Center Building on Fifth Avenue on the downtown Olympia waterfront.
Tony Overmantoverman@theolympian.com

Preliminary plans for The Views on Fifth development, which has been proposed for the vacant nine-story Capitol Center Building on downtown Olympia’s isthmus.
CourtesyKen Brogan

The vacant Capitol Center Building’s latest suitor has proposed an investment of nearly $30 million in downtown Olympia.

Local developer Ken Brogan is determined to buy the nine-story building and transform the derelict property into a desirable place to live and socialize. He hopes to complete the transaction in early November with a goal of breaking ground next spring.

After submitting site plans for review this week, Brogan must now slog through the months-long permit process — fully aware that at least one group of citizens will fight his Views on Fifth Avenue project every step of the way.

“I’m building it,” Brogan told The Olympian. “That’s it.”

Board members of the Olympia Capitol Park Foundation say their problem is not with the project itself, but rather its location on the strip of land between Budd Inlet and Capitol Lake. The foundation has led the battle cry to demolish the tower, protect the view of the State Capitol Building and create a civic space on prime downtown property.

Jerry Reilly, chairman of the foundation, argues that the city missed an opportunity to acquire and tear down the building during the real estate market slump. Citing failed attempts by private developers to build condominiums and a hotel at the site, Reilly also expects the latest proposal to fall short.

“If it could have been done, they would have done it,” said Reilly, adding that Brogan has the right idea for the wrong spot. “I hope he takes it four blocks to the east.”

According to the developer, the Views on Fifth project will create 136 apartments in the nine-story building, along with a restaurant, cafe and gym. The plan also calls for demolishing a one-story building on the site to make way for a three-story parking garage that includes residential units.

Although the preliminary plans show a restaurant on the ground floor, Brogan said he wants to create a “first-class restaurant” on the top floor. At its Oct. 19 meeting, the city’s Site Plan Review Committee members suggested revisions that would emphasize more pedestrian-friendly features such as a public plaza and outdoor gathering space.

Brogan said he hopes to seal the deal early next month on buying the 1-acre property for $6.8 million from current ownership group Views on Fifth Avenue Ltd. In a best-case scenario, the project will receive its permits in time for construction to begin in April and for tenants to move in 10 months later.

“The design is very elegant and classy and it will make a great statement in downtown Olympia,” he said. “I am here to build a great property that will enhance the revitalization of our downtown.”

Renee Sunde, economic development director for the city, said the project could be a catalyst for more investment in downtown Olympia.

Last year, Sunde said her staff estimated the proposal could generate at least $1.7 million in tax revenue in the first two decades. She expects those numbers to be “significantly higher” because of the new construction that has been proposed.

“Any movement away from blight is going to be good for the community and the city’s Downtown Strategy,” said Sunde, referring to the implementation of planning and policy goals.

“We’ve had a lot of pent-up demand in downtown Olympia, especially for a broader mix of housing options,” Sunde said. “I do think it’s a different time in downtown Olympia. We really are seeing quality investment happening.”

Olympia has been on a land-buying spree this year after announcing a plan to acquire 300 acres of park space.

The plan has been made possible by the voter-approved Metropolitan Parks District, which will generate about $3 million a year for park maintenance and acquisition.

In April, the city council approved the purchase of 149 acres, including the 74-acre Trillium property in the LBA Woods for $5 million and the 75-acre Kaiser Heights property in west Olympia for $1.1 million. In August, the city bought 2.75 acres in the West Bay woods for about $308,000 to help protect a colony of great blue herons. Last month, the city agreed to buy the 72-acre Bentridge property for $6.9 million as part of the LBA Woods.

“It would be reasonable for the city to buy,” said Allen Miller, board member with the Olympia Capitol Park Foundation.

Miller said the foundation will argue against the project’s height and view impairment of the State Capitol. A height limit of 35 feet was established on the isthmus in 1982, but the zoning doesn’t apply to the 130-foot Capitol Center Building, which was built in 1966 and grandfathered in.

The project opens a door for the height argument, said Miller, who also cites community support for a civic space at the site. A 2015 survey of 4,000 Olympia households showed that demolition of the Capitol Center Building was among the top five highest priority park projects. In 2008, the foundation collected 5,000 signatures to support a park and civic space on the isthmus.

“I don’t know why the city council isn’t listening to its constituents,” Miller said.

The signature drive from 2008 led to a feasibility study that estimated the cost of developing an isthmus park at $28 million to $32 million.

Mayor Pro Tem Nathaniel Jones has previously advocated for state funding to demolish the Capitol Center Building — sometimes referred to derisively as “the mistake by the lake” — and make room for a park. Jones acknowledges that the city has been unable to come up with a financing plan “that makes sense.”

“Even with broad public support and a willingness to spend tax dollars, the price tag has never met the test of reasonable people,” Jones told The Olympian in an email, noting his skepticism on whether the Views on Fifth proposal will pan out. “I have concerns because there have been similar project proposals for the building in the past that failed; however, I won’t stand in the way of an active proposal.”

Olympia Mayor Cheryl Selby said she understands the emotional appeal of creating a new park and civic space at the Capitol Center Building property. But she said a private development can create a win-win scenario compared to the cost for the city to take on the property.

“It’s hard to justify spending that kind of money for something that is going to be a green piece of grass for a long time,” Selby said. “We wouldn’t have any money left over to develop it for years.”

In the meantime, Selby will join the rest of the city in waiting to see whether the Views on Fifth project comes to fruition.

“That’s the $30 million question,” Selby said. “The idea of having someone invest that much money in downtown Olympia is pretty exciting.”